Bitcoin has reached block 961,632, triggering the mandatory signaling period for BIP-110, a controversial proposal intended to temporarily limit non-financial data embedded on the network.

The proposal entered the signaling phase at about 19:35 UTC on Saturday. Miner support has rarely risen above 2.5%, far below the 55% threshold required.

The push reflects an ongoing debate within the Bitcoin community over the network's primary purpose. Non-financial data embedded on Bitcoin—most notably through Ordinals inscriptions and BRC-20 tokens, which allow images, text, and other content to be inscribed onto individual satoshis—has driven increased block space demand since early 2023. Proponents of restricting such data argue it congests the network and raises transaction fees for ordinary users, while opponents contend that Bitcoin's ledger should remain permissionless for any valid use of block space.

Supporters of BIP-110 are advancing it as a user-activated soft fork (UASF), a framework that would depend on node operators rather than miners to enforce the rule change. Under that approach, users would update their node software to reject any block from miners that does not signal support for BIP-110, effectively pressuring miners to comply or risk being cut off.

Prominent Bitcoin figures, including Strategy chairman Michael Saylor and Blockstream CEO Adam Back, have voiced opposition to the proposal.

Backers of BIP-110 point to the 2017 activation of SegWit through BIP-148 as precedent. SegWit, which separated digital signatures from transaction data, was adopted by users even though it did not have the required miner support at the time.

If users broadly adopt BIP-110, the immediate effect would be a rejection of the network that nearly the entire mining sector is currently building. That could produce a period in which two competing Bitcoin networks exist: the dominant mainnet, supported by most hash power and institutional capital, and a minority chain made up only of nodes enforcing BIP-110.

In theory, the breakaway chain could gain support if more node operators join, increasing pressure on the mining sector. It could also stall entirely if it fails to attract enough backing. Either outcome would be shaped in part by the stance of major exchanges, wallet providers, and custodians, whose adoption decisions typically determine which chain inherits the Bitcoin brand and market liquidity.

The signaling window is scheduled to remain open until Bitcoin reaches block 965,664, which is expected in about four weeks.